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Manthorpe: China and Japan defy the ties that bind in dispute over islands

The disputed islands known as Senkaku in Japan and Diaoyu in China in the East China Sea.

Photograph by: STR
, AFP/Getty Images

Asia’s weeklong Autumn Festival came just at the right moment to take the steam out of the increasingly bitter and bellicose dispute between China and Japan over the Senkaku island group in the East China Sea.

Returning to work this week still bathed in the afterglow of the holidays, Chinese workers will find famous Japanese companies like carmakers Honda, Toyota and Mazda, and department store chain Aeon that pulled down shutters as anti-Japanese rioters roamed the streets, open again for business.

Perhaps this new season will see the images of the last few weeks sink into memory. There’s the burning Japanese cars and wrecked showrooms, flotillas of Chinese and Japanese vessels steaming for the disputed waters, and such bizarre pictures as a line of black-suited Chinese business men and women holding up a sign reading “Even if China was covered in graves, Japanese must all be killed.”

True, not all animosity can be dulled by holiday feasting.

Several Chinese banks are not attending the International Monetary Fund meeting in Tokyo this week in protest at Japan’s administration of the five uninhabited islands the Chinese call Diaoyu and claim as “sacred Chinese territory.”

But perhaps the pointed remarks of IMF head Christine Lagarde last week in an interview ahead of the meeting will produce some calming realism.

The world, she said, cannot afford to have two of its biggest economies and trading partners distracted by this territorial dispute.

“Both China and Japan are key economic drivers that do not want to be distracted by territorial division,” she said. “The current status of the economy and the global economy needs both Japan and China fully engaged.”

In the last decade or so the Chinese and Japanese economies have become not only the world’s second and third largest after the United States, but also two of the most highly integrated.

China’s economic miracle of the last 30 years would not have been possible without Japanese investment, technological transfer and model of industrialization.

Japan would be in dire straits without China’s pool of cheap labour and growing consumer marketplace.

In a paper published last week Yves Tiberghlen, Director of the Institute of Asian Research at the University of British Columbia, said that 12 years ago 30 per cent of Japan’s exports went to the United States and only 12 per cent to China, including Hong Kong.

Last year 25 per cent of Japan’s exports went to China and only 15 per cent to the U.S., with predictions that will shrink to 10 per cent by 2020.

Meanwhile figures from Japan’s Ministry of Finance say that last year the country’s two-way trade with China was worth $350 billion, almost double Japan’s trade with the U.S.

Japanese officials express confidence that in this outbreak of anti-Japanese fervour in China, as in all similar incidents since they began in about 1980, will be overridden by the realization that Chinese jobs and prosperity depend to a substantial degree on the relationship with Japan.

It would be possible to have more faith in that analysis but for the domestic political situation in China.

While China’s regime founder Mao Zedong was alive Beijing made no claims to the Senkaku Islands nor to the Spratley and Paracel islands in the South China Sea.

The claims appear to have been sparked in part by indications that the exclusive economic zones around these islands would give ownership to substantial reserves of oil and natural gas.

But they also coincide with the indoctrination of Chinese people by the Beijing government with intense and irrational nationalism, aimed especially at the Japanese.

The reason is that the Communist party since the murderous chaos of the Cultural Revolution of the 1960s and early ’70s is aware that it has lost public trust. Inciting nationalism is a useful tool to have at hand in times of threat.

And this is one of those times. China’s economy has slowed in response to the global recession, jobs are disappearing and the expectation of a better life that has sustained the Communist party in power looks increasingly hollow.

This comes as the party negotiates the tricky business starting next month of handing leadership to the fifth generation of its bosses since the 1949 revolution.

But these new men are very different from previous generations. They are dominated by so-called “princelings,” the offspring of the revolutionaries who have risen to power and extraordinary wealth because of their bloodlines.

They seem dimly aware that the gap between the way they live their lives and those of ordinary Chinese is yawningly wide and growing wider.

But they seem unwilling or incapable of addressing the social distortion which may well cause their own downfall.

Occasionally they throw a sacrifice to the street, such as the recent expulsion from the party of the charismatic and ambitious multimillionaire populist Bo Xilai. He is being prepared for trial on as yet unclear charges of corruption, abuse of power and improper sexual relations with hints that he might even be accused of preparing a coup.

But the party’s problem is that Bo is not the exception among the leadership. He is representative of all of them.

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